Residence converted to rental can i used as deduction

[Asdf12345678]

how did you solve the issue?

I solved it with the help of Taxing Matters. I won't owe any taxes this year.

However I won't qualify for EIC this year either.

 

[Asdf12345678]

Hello Again...

This didn't get this sale completed until January 2019 so my research tells me that it will affect taxes this year. I have a couple more questions.

1.) I have a house I want to sell using contract for deed. I claimed it as a rental house last year, but have not had any luck renting it out. I want to sell it using contract for deed this year. I have read that I can deduct the entire sale of the house in one tax year (2019) instead of splitting it up over 10 years (length of contract).

If I do this I am assuming that I still have to pay taxes on the interest part of the payments every year?
And I am still able to claim depreciation every year on the house or do I lose that?

Also if I do this and the buyer defaults do I have any recourse?

Example; If they default in 2021, and I foreclose on the house then I sell it again would I have to pay taxes all over again on the total sales price?

2.) I have another house that I sold last year using contract for deed. I was able to get all of the forms and found software online which allowed me to add this house to my 2018 return. I have an individual interested in buying several years worth of payments for $x,xxx dollars in one lump sum after which they would return the contract to me and I would collect payments again or they would pay another lump sum later on down the road to buy additional payments.

Can I split this up. Example; say they pay me $7,500 in 2019 to buy 36 months of payments. Can I split this up over 2019, 2020, 2021 claiming $2,500 in income each year or do I have to claim the entire amount in one year?

Thanks

 

[LdiJ]

Hello Again...

This didn't get this sale completed until January 2019 so my research tells me that it will affect taxes this year. I have a couple more questions.

1.) I have a house I want to sell using contract for deed. I claimed it as a rental house last year, but have not had any luck renting it out. I want to sell it using contract for deed this year. I have read that I can deduct the entire sale of the house in one tax year (2019) instead of splitting it up over 10 years (length of contract).

If I do this I am assuming that I still have to pay taxes on the interest part of the payments every year?
And I am still able to claim depreciation every year on the house or do I lose that?

Also if I do this and the buyer defaults do I have any recourse?

Example; If they default in 2021, and I foreclose on the house then I sell it again would I have to pay taxes all over again on the total sales price?

2.) I have another house that I sold last year using contract for deed. I was able to get all of the forms and found software online which allowed me to add this house to my 2018 return. I have an individual interested in buying several years worth of payments for $x,xxx dollars in one lump sum after which they would return the contract to me and I would collect payments again or they would pay another lump sum later on down the road to buy additional payments.

Can I split this up. Example; say they pay me $7,500 in 2019 to buy 36 months of payments. Can I split this up over 2019, 2020, 2021 claiming $2,500 in income each year or do I have to claim the entire amount in one year?

Thanks

This is a little much to ask of an internet forum manned by volunteers. You really ought to take yourself to a tax professional for advice, AFTER April 15th.

 

[Asdf12345678]

I do agree, but taxing matters seems to really know this stuff.

 

[LdiJ]

I do agree, but taxing matters seems to really know this stuff.

He does, and so do others, but its still too much to ask of volunteers, particularly at this time of year.